South Side development has yet to deliver on big plans...

1of 9A cow stands in the foreground on land owned by Verano Land Group Land on San Antonio’s South Side. Verano acquired the land about 12 years ago to build a mixed-use development surrounding the Texas A&M University-San Antonio — shown in the background. Verano is once again trying to sell the land.Photo: Tom Reel /Staff photographer

2of 9The San Antonio skyline is visible from the Texas A&M University-San Antonio campus in this 2016 file photo. Verano Land Group assembled some 1,800 surrounding the campus with plans to build a mixed-use development, but nothing has been built so far.Photo: Jerry Lara /Staff file photo

3of 9The lack of commercial development around Texas A&M-San Antonio on the South Side is a point of frustration for the college, said Bill Spindle, its vice president for business affairs and chief financial officer. The school is counting on development to attract more students.Photo: Courtesy

4of 9Counilman Rey Saldaa during the San Antonio City Council meeting in the City Council Chambers, Thursday, June 7, 2018.Photo: Josie Norris, Staff / San Antonio Express-News

5of 9A Delaware company had an option to purchase 1,800 acres surrounding the Texas A&M-San Antonio campus, but decided earlier this year not to buy the land. Verano Land Group, which owns the land, says it’s now talking to three or four parties interested in buying the land.Photo: Tom Reel /Staff photographer

6of 9Land surrounding the Texas A&M University-San Antonio campus is approved for the development of about 5,700 residential units and about 3 million square feet of commercial and industrial space.Photo: Tom Reel /Staff photographer

7of 9The city of San Antonio declared Verano Land Group, which owns about 1,800 acres surrounding the Texas A&M University-San Antonio campus, in default of a development agreement. The agreement required 140 homes to be constructed by the end of last year, but so far nothing has been built. Verano is now searching for a buyer for the land.Photo: Tom Reel /Staff photographer

8of 9Verano Land Group hopes to line up a buyer in the first quarter of next year for 1,800 acres approved for a master-planned community around the Texas A&M University-San Antonio campus. Verano has not disclosed an asking price for the land.Photo: Tom Reel /Staff photographer

9of 9Verano Land Group spent a reported $65 million assembling land to build a mixed-use development around the Texas A&M University-San Antonio campus. The land now is for sale.Photo: Tom Reel /Staff photographer

It’s been described as “one of the best development opportunities Texas has seen in decades.”

Yet the 1,825 acres — on which hopes for a planned mixed-used development surrounding Texas A&M University on San Antonio’s South Side have been pinned — has remained relatively undisturbed for years.

More than 5,700 residential units and about 3 million square feet of commercial and industrial space have been approved to be built on the land, but all that’s there now are acres of trees, brush and cacti, along with roaming cows in the shadows of the college.

The lack of activity led the city of San Antonio in August to declare owner Verano Land Group in default under a development agreement. The city said Verano has not kept to a construction timeline spelled out in the agreement.

“We are unhappy and disappointed that this hasn’t followed the timeline,” said Verónica “Vero” Soto, director of the city’s Neighborhood and Housing Services Department. “We know we need economic development in that area, and we know we need the housing in our city.”

For its part, Verano is trying to find a buyer for the property. The developer, which has owned the property for about 12 years, put the land up for sale in 2014 before deciding against selling. It’s now flipped-flopped again and put it back on the market.

“We are talking to at least three or four different groups that have, in our judgment, the capability to provide the city with development down there,” said Joe DeSimone, a Verano general partner, in Hendersonville, Nev.

“We’re not master-plan developers in Texas,” DeSimone said of the owners, who include some investors who made their fortunes in Nevada’s gaming industry. “We think there’s probably better-qualified people who will add more value to the community.”

Verano is hoping to line up a buyer in the first quarter of next year. An asking price for the land has not yet been determined, DeSimone said.

The delays are raising long-term concerns for college officials, who have been anxiously awaiting housing and shops to help attract more students. The school has about 6,700 students.

“Since the university was built, there’s always been the promise that there would be a community built around it,” said Bill Spindle, the college’s vice president of business affairs and CFO. “That was kind of the whole point, that we were an anchor of a bigger community.”

Verano’s 2,500 acres

Verano assembled roughly 2,500 acres between South Loop 410 and Toyota’s truck plan for a reported $65 million in 2006. The developer donated 700 acres for the A&M campus, which opened in 2011.

Verano planned to capitalize on the fledgling campus to build houses, apartments, restaurants, shops, office buildings and industrial space — all in a part of the city that has long been largely ignored by developers.

The city created a Tax Increment Reinvestment Zone (TIRZ) to jump-start the project. The Verano TIRZ would make up to $250 million in property tax revenue — the cream of increasing property values — available to the developer for public improvements to the site, like streets, sidewalks, lighting and drainage.

A messy web of litigation in San Antonio and Las Vegas, however, became a distraction for Verano.

In a suit filed in 2012 in Nevada, Verano alleged three of its former managing partners created VTLM Texas to become the project’s developer without Verano’s knowledge or consent.

The suit said VTLM — and not Verano — stood to receive the $250 million in public money for the reimbursement of development costs because VTLM controlled the TIRZ.

Verano also accused its law firm, then known as Fulbright & Jaworski, and one-time partner Jane Macon of conspiring to put their interests ahead of Verano and its investors. The law firm filed its own suit seeking more than $500,000 in legal fees from Verano.

Things became even more complicated when VTLM sought bankruptcy protection in 2013.

The following year, a bankruptcy judge approved a settlement that essentially allowed Verano to shop the property without it being tangled in litigation. VTLM later transferred control of the TIRZ to Verano.

Verano hired the national real-estate brokerage Jones Lang LaSalle to market the property.

The brokerage called the property “one of the best development opportunities” in the state and “ripe for the picking” in a press release. Perhaps, but no buyer emerged.

Councilman Rey Saldaña wonders whether Verano’s owners may have been holding out for even higher offers. A swath of the project falls in his Southwest Side district.

“It seems like when you have out-of-town ownership, (the) interest is in a spreadsheet with a number going up as high as possible, rather than (in) economic development or the investment of residential communities,” Saldaña said.

Verano scales back

Renewed optimism surfaced at the start of 2016 when Verano was designated as the developer of record by the City Council.

Verano, meanwhile, opted to take “a more conservative and realistic approach” with the project to reflect “changed market conditions” and “development assumptions.” It scaled back the development from 6,938 residential units to 5,711. Commercial and industrial space was cut in half from 6 million square feet to 3 million square feet.

Verano announced it had lined up two home builders, David Weekley Homes and Scott Felder Homes, to build 100 single-family homes. The homes were never built, however.

Gary Runner, David Weekley Homes’ San Antonio division president, said in an emailed statement that the company had a contract to purchase lots but Verano never prepared the lots for construction.

Under the agreement between Verano and the city, 70 single-family homes were supposed to have been built in both 2016 and 2017. Construction requirements stepped up this year, with the schedule calling for 100 single-family homes, 200 multifamily homes, 25 condos/townhomes, 75,000 square feet of offices and 20,000 square feet of shops.

Again, none of it has been built.

Default letter

In an Aug. 30 letter to DeSimone, Soto, the city’s director of Neighborhood and Housing Services, wrote Verano to say it was in default of the terms of the development agreement for it not keeping to the construction schedule.

The “lack of progress on the development is concerning to the City considering the likelihood that a substantial delay will negatively impact the project and all involved,” Soto said in the letter.

Six days later, DeSimone wrote back to say Verano was focused on finding a buyer for the property. The letters were obtained through an open-records request filed with the city.

Property records show Verano gave SALandpartners, a Delaware company, an option to buy the 1,800 acres last December. SALandpartners simultaneously provided Verano a $13 million mortgage loan.

According to DeSimone’s letter, the buyer canceled the deal in May and advised the city it was intending to foreclose on the property.

“While it may have been (SALandpartners) intention to secure title, Verano retired the debt and we continue to own the property,” DeSimone said in the letter. “In hindsight, we do not believe this particular buyer acted in good faith and we are moving forward.”

Verano repaid the loan in early August, property records show.

SALandpartners’ Christopher Kallivokas, of Coral Gables, Fla., said in an email that it had “an option to purchase the property at a certain price. We elected not to purchase the property at that price and (Verano) paid us back, on time and in full.”

In an interview, Soto said the city has been “pressuring” Verano “to get back on track” with the project. Soto said the pressure has included discussing the possibility of dissolving the TIRZ.

Soto, though, acknowledged dissolving the TIRZ would make it harder for Verano to find a buyer.

“We’re hesitant to take that move forward,” she said. “We’re trying to move it forward by keeping it in place. Dissolving the TIRZ has consequences. A consequence could be that nothing happens (with the land) for a longer term of time.”

Tim Bartlett, Verano’s former president, said terminating the TIRZ would would be a mistake.

“It is critically important that the city keep the TIRZ in place because that is key and critical to the success of the development in order to get the reimbursement for infrastructure costs,” Bartlett said.

Bartlett has a stake in seeing that the TIRZ remains in place. Last year, he bought from Verano about 20 acres to build 40 townhomes and 80 single-family homes designed for student rentals. He has no timeline for when construction will start, but it could be as early as next spring. The benefits of the TIRZ would extend to his project as well.

“I would need the reimbursement for the roads, sewer and water, and all the utilities in order to be able to make any money at all,” Bartlett. “I really have to have it.”

Late last month, Verano announced it had resolved the litigation with its former law firm and attorney, resulting in Verano obtaining a “significant settlement.” DeSimone declined to reveal the settlement amount. The law firm, now known as Norton Rose Fulbright, and attorney Jane Macon, now a partner at Bracewell, did not respond to requests for comment.

Verano now has “a lot more flexibility financially to make sure we find the proper master-plan developer” as a result of the settlement, DeSimone said.

For many, construction activity on the Verano land can’t happen soon enough.

“I think this soap opera will go on longer than ‘Days of Our Lives,’” said Saldaña, the city councilman. “The rest of us are just left wondering when we can expect to see that development to help balance the growth of the city to the south.”